PayPal Inc. and Bill Me Later have good momentum as they expand into mobile and contactless payments, their parent company said.
The two businesses complement mobile shopping by allowing easy access through a smaller screen or device, said John Donahoe, the president and chief executive of the parent company, eBay Inc.
Many consumers now "start some of their shopping online and finish on a mobile phone device, and vice versa," Donahoe said Wednesday in an earnings conference call. "The power of mobile is partly the application, but it also brings eBay's listings and PayPal's payments capabilities to consumers, regardless of where they are."
Moreover, including a mobile-payment option increases buyer engagement and buyer frequency, the CEO said.
PayPal's newest mobile application, which was rolled out this month, lets consumers deposit checks into their PayPal account using images captured with the camera on the iPhone from Apple Inc.
PayPal has become a force in the payments market, observers say.
"PayPal has managed to build an electronic-wallet service that protects consumer data from merchants, which makes it easy to shop online," said Gwenn Bezard, a research director at Aite Group LLC.
He added: "The business is now global, which is driven by the overall growth of e-commerce instead of just eBay's business. Many merchants now accept PayPal payments as much as they accept Visa and MasterCard payments."
However, companies such as Google Inc. and MasterCard Inc. are developing services to compete with PayPal, Bezard said.
In August MasterCard announced a partnership with a Belgian payments company that it hopes will improve cross-border online shopping.
To edge out PayPal, MasterCard and others would "have to provide a better checkout experience, and the industry is still not seeing any signs of that," Bezard said.
In contactless payments, PayPal and Bling Nation Ltd. have been working together to enable PayPal's 2,000 employees to access their PayPal accounts using contactless stickers and special BlingBox terminals.
"It is only a matter of time before we start seeing a PayPal-acceptance sticker on the windows of many brick-and-mortar merchants," said Peter Quadagno, the president and chief executive of the consulting firm Quadagno & Associates in West Chester, Pa.
PayPal reported revenue of $838 million for the third quarter, up 21.8% from a year earlier. Its number of active accounts rose 16%, to 90.5 million.
PayPal's payments volume rose 40.4%, to $13.9 billion.
At Bill Me Later, payments volume rose 53.8% in the quarter, to $306 million.
The parent company, which is based in San Jose, Calif., had "promising results" in the third quarter from positioning Bill Me Later within eBay's checkout and acquiring 60,000 new accounts for the service, Donahoe said.
Bill Me Later enables consumers to pay for purchases at participating merchants without using a credit card. When checking out, consumers provide their birth date along with the last four digits of their Social Security number. Later they receive a bill from the merchant and are asked to pay within a specific time period the merchant designates.
Revenue at eBay rose 0.4% year over year, to $2.25 billion.
Its net income rose 23.4%, to $432 million.
